Paved with good intentions?

Paved with good intentions?

If Mrs May hoped that her speech in Florence would unblock the Brexit talks, she must be feeling somewhat disappointed. Yesterday, Donald Tusk, the President of the EU Council politely welcomed its “constructive and more realistic tone” but then went on to say, “As you know, we will discuss our future relations with the United Kingdom once there is so-called ‘sufficient progress’. The two sides are working hard at it. But if you asked me and if today Member States asked me, I would say there is no ‘sufficient progress’ yet.”

Mrs May’s speech, as we mentioned recently, was optimistic in tone and stated very clearly that the EU had never really worked for us. It “never felt to us like an integral part of our national story” although she stressed her enthusiasm to work closely with it once we leave.

But what exactly would this new partnership look like? “The question is then how we get there: how we build a bridge from where we are now to where we want to be,” said the Prime Minister. Unfortunately, she failed to answer her own question, apart from stating that a transitional period would be needed and ruling out ongoing membership of the European Economic Area, even in the short term.

The speech encapsulated the problem with which the Government is struggling. Like Boris Johnson, Mrs May sounded very hopeful about the UK’s prospects post-Brexit. She is right to do so. We potentially have a great future as an independent nation. The problem is reaching this point with our economy intact. Daniel Hannan has recently joined in the trade debate. enthusing about the prospects for free trade once we’re out of the EU, but we keep coming back to the same question:- how are we going to leave?

It isn’t helping that our team, led by David Davis, accepted the EU’s preconditions that discussions on a wider future relationship, including trade, cannot begin until “sufficient progress” has been made on the Irish border issue, the “divorce bill” and the rights of EU citizens currently living in the UK. Mrs May stressed that the EU needed to “be creative” in working out its future relationship with the EU, while David Davis insisted that there should be “no excuses for standing in the way of progress”.

But even if the outstanding issues are resolved, and there is little sign of any meaningful agreement as yet, what sort of agreement exactly does the UK want? Michel Barnier, the EU’s chief negotiator, has called for “a moment of clarity” from the UK’s side. He is quite right to ask this question as there are plenty of us this side of the Channel who can’t wait to see the UK safely out of the EU but at the same time are in a quandary regarding how the Government proposes to get us there. The hints in Mrs May’s speech about the sort of transitional arrangement she would like suggest somehow more or less staying in the EU but somehow not being subject to the European Court of Justice – in other words, still in “having cake and eating it ” territory and thus unacceptable to the EU.

Scan through our website and read the comments on earlier articles and you will find a few people doubting if Brexit will ever happen and fearful that Mrs May is going to betray us and call the whole thing off. While fully appreciating the anxiety of such people, I do not believe this to be remotely possible. The slightest hint of back-pedalling on Brexit and Mrs May would immediately face a leadership challenge. What is more, the Tories garnered much of the leave vote in last June’s General Election because they promised to deliver on Brexit. Following the better-than-expected showing by Labour under Jeremy Corbyn, a botched or half-baked Brexit means electoral meltdown for the Tories and they know it.

Mrs May and her team are therefore under great pressure. There is no turning back, whatever some sections of the press may say – or indeed, secretly wish for. One possible scenario is that Mrs May and David Davis may pull out of the talks, blaming EU intransigence and falling back on the “no deal is better than a bad deal” position – in other words, the so-called WTO option. Iain Duncan Smith, among others, has been urging the government to prepare for no deal.

It probably won’t come to this, but we can expect a rocky road ahead in the next few weeks, especially as much of the business world does not share the optimism of Mr Duncan Smith or Professor Patrick Minford that the WTO option, coupled with a more or less total elimination of tariffs, is going to be beneficial. In the long term it may be, but the shock it would deliver to UK businesses in the immediate post-Brexit period would be immense with, among other things, the likelihood of a massive stack of lorries on the M20 building up the moment we leave, unable to clear French customs due to a lack of the necessary paperwork.

So the Brexit clock keeps ticking and M. Barnier keeps reminding us that we will become a “Third Country” in just over 18 months time. Given it’s now more than 15 months since the Brexit vote, we are only six weeks or so away from the halfway point between the referendum and the result we sought. We can but hope that some sort of clarification or change of tack will take place soon or the dream for which so many of us campaigned for so long may turn out, in the short term at least, to be more of a nightmare. The road to Hell, they say, is paved with good intentions. The road to Brexit may turn out to be very similar.

Last Sunday on the Andrew Marr show, Davis said they had been working on “transitional” arrangements since the start of the year.
Maybe so, but not in the present context.
The PM in January stated she would not seek a form of unlimited transitional status, but a phased process of implementation., with the agreement all sorted by 29/03/2019.
What I believe we have got now is panic mode, as Barnier keeps stating – “time is running out”, and HMG need more time as so much has been wasted so far
What is coming across now is that HMG, and the political establishment itself, has no undestanding of the working and objective of the EU, and the PM thinks the EU will cave in as they won’t punish the UK to make a political point.
But the EU is political, and the unity of the 27 comes first.

Since presenting their three pre-conditions the EU has not budged an inch. They want the ECJ to have jurisdiction over EU citizens living in the UK. That is a non starter and they must have known it. We have offered residency rights to all EU citizens currently here. What more can we do?

The EU have no legal right to any money after we leave the EU and their own legal team know it. They now want us to agree to the bill before we know what we are getting. Another non starter.

Logic dictates that the question of the Irish border cannot be settled until we know what the terms of a future trade agreement will be.

All the above represent impossible demands, which leads me to believe that the EU are not actually negotiating. Varoufakis, the Greek former finance minister, warned us what the EU tactics would be and so have they proved to be.

A trade deal should be very easy to agree, on the basis that we are currently compliant with all EU standards. Commercially It is in both our interests to agree such a deal. However, the politics presents a roadblock. The Commission are terrified that a straightforward trade deal with us will encourage others to seek the same terms. I can see no way past the politics that doesn’t bind us to the ECJ, freedom of movement and the customs union. EFTA/Flexcit gets us out of the customs union but doesn’t solve the other two issues, but if we are outside of the customs union with the the appropriate procedures in place, we may as well be outside the Internal market. The tariffs, other than on cars and agriculture are insignificant and the exchange rate, as it currently stands, has already reduced the potential pain.

We will need to agree an air services agreement, based on bilaterals, which will cause some pain for Ryanair and we will need to replace some agencies. For example the civil aviation authority will have to be more than a cipher for the EASA. There will be some disruption, but we always knew that.

I regret to say that it appears that there will be no deal because the EU side are driven more by politics than by commerce. As IDS has said we must prepare now for WTO. Oliver Letwin has said that there is still time.

Further to this post, more detail has emerged of the free trade think tank involving Daniel Hannan. Among the advisors will be the former Australian Prime Minister Tony Abbott. Also present at yesterday’s launch were Boris Johnson and Dr Liam Fox.

In addition, this piece in City AM by Brian Monteith is very critical of the Government’s progress to date and is well worth reading. Is this talk of transitional deal part of a “stalling process” as he suggests? If so, the Tories will pay dearly as pointed out above.

On the other hand, Richard North’s latest blog re-states his no-doubt well-informed claim that Mrs May could well be preparing to walk away from the talks as a way of un-jamming the talks if the various EU bodies still won’t budge, judging that insufficient progress has been made on the three sticking points.

We will know a bit more today and a lot more by the end of the Tory party conference, but at the moment, trying to work out what is actually going on is a well-nigh impossible task.